Selling kit in the traditional way? Days might be numbered

Public cloud spend to hit $127bn by 2018, predicts IDC

Tea-leaf readers at IDC have slurped their latest cuppa and determined from the waste at the bottom that spending on the public cloud will run six times faster than traditional tech over a five-year period.

The industry soothsayer is forecasting customer investment in the fluffy white stuff to reach $56bn this year, and grow 22.8 per cent until the end of 2018, when the money exchanging hands via public clouds is touted to reach $127bn.

“Over the next five years, IDC expects the community of developers to triple and to create a ten fold increase in the number of new cloud-based solutions,” said Frank Gens, senior veep and chief tea-leaf reader analyst.

“Many of these cloud-based solutions will become more strategic than traditional IT ever has been,” the IDC man added.

He said certain vendors - notably Adobe and IBM - are selling services via the cloud first, which is also driving adoption. As the number of applications and use cases “explode”, cloud services will permeate “almost every B2B and consumer services marketplace”.

If IDC is correct, then within three and a bit years, public IT cloud services will account for more than half of worldwide software, server and storage spending growth.

Software-as-a-service is expected to remain the dominant segment, representing 70 per cent of spend on public clouds expenditure this year. Most of the customer demand is at the application level, said IDC.

Coming next in the public cloud stakes is infrastructure-as-a-service, which the market beanie expects to benefit from a 31 per cent uptick in cloud storage over the five-year forecast timeframe.

In fact, platform-as-a-service and cloud storage are expected to be the fastest growing categories, fuelled by developer cloud services and big data respectively.

There is a race to the bottom among the major public cloud players, with AWS, Google and Microsoft using price as the major competitive weapon to win new customers. In the case of AWS, it is suspected that the firm may eventually run into trouble.

Gens at IDC reckons there will “unprecedented competition and consolidation among the leading cloud providers”. ®